Tuesday, June 27, 2006

May Existing Home Sales Down 6.6% YOY

From the National Association of Realtors:

May Existing Home Sales (PDF)

Nationally, Existing home sales for May fell 1.2% from April, and 6.6% from last May. The Northeast saw a 4.2% monthly decline, and a 5% year over year decline in volume. April sales were revised downward to 6.75m from a 6.76m yearly rate.

Inventory of existing homes increased significantly in May, up 5.5% from April, and up 41% in the last 12 months. Months supply now stands at 6.5 months, up from 6.1 months in April, and up from 4.3 months last May.

From Bloomberg:

U.S. Existing Home Sales Fell 1.2% to 6.67 Mln Rate in May

Sales of previously owned homes in the U.S. fell in May to the lowest since January as higher mortgage rates sapped demand, a private report today showed.

Resales declined 1.2 percent to an annual rate of 6.67 million, from 6.75 million in April, the National Association of Realtors said today in Washington. Sales fell 6.6 percent compared with a year earlier.

Housing will be a drag on the economy this year as buyers are deterred by the highest mortgage rates since 2002, economists say. An unexpected increase in sales of new homes reported by the Commerce Department yesterday bears out Federal Reserve predictions that the cooling will be gradual.

``The general trend is toward weaker housing market activity,'' Anthony Chan, chief economist at JPMorgan Private Client Services in Columbus, Ohio, said before the report. ``More and more people are being priced out of the housing market, precisely at a time when rates are going up.''

Resales were expected to decline to an annual rate of 6.6 million from April's originally reported 6.76 million, according to the median estimate of 58 economists in a Bloomberg News survey. Forecasts ranged from 6.43 million to 6.88 million.
...
Before the May report, existing home sales fell in all but four months since May 2005, the Realtors' reports showed. Existing home sales account for about 85 percent of the housing market and are recorded when a contract is closed.

The supply of homes rose 5.5 percent to 3.6 million, bringing inventories up to 6.5 months' worth at the end of May.

The median price of an existing home rose 6 percent in May from a year earlier to $230,000, the Realtors group said.

Resales of single-family homes fell 1.5 percent to an annual rate of 5.82 million. Sales of condos and co-ops rose 1.9 percent to an 852,000 rate.

Purchases fell 4.2 percent in the Northeast to 1.13 million and fell 3.8 percent in the Midwest. They rose 0.4 percent in the South and rose 0.7 percent in the West.

121 Comments:

Blogger patient homebuyer said...

this is the beginning of the end for the greedy people, hopefully i can buy my home in the next 6-9
months

6/27/2006 09:18:00 AM  
Anonymous UnRealtor said...

Currently, there are 31,540 properties advertised for sale in NJ on our site. For Residential Properties that are Multiple Listed with Garden State, 99% are available to be searched on this site.

http://www.gsmls.com/

6/27/2006 09:19:00 AM  
Anonymous Anonymous said...

They don't say how many houses were sold in May 2006. The published year-to-year number includes gains that were made during the second and third quarter of last year.

6/27/2006 09:21:00 AM  
Blogger Shailesh Gala said...

Anyway to get more granular data on NNJ region? The whole NE sales are down, but prices are up. Is the local NNJ market down more or less?

6/27/2006 09:25:00 AM  
Blogger Shailesh Gala said...

Analysts said they believed that home sellers in many parts of the country will soon start to trim their asking prices in response to the rising level of unsold homes. That will help to boost sales.

Sales of Existing Homes Fall in May As Demand in Northeast Plunges

6/27/2006 09:29:00 AM  
Blogger grim said...

Anon,

You'll need to wait until the NAR releases the Pending Home Sales Index for May. That will be released in early July. PHS looks at contracts signed over that period.

jb

6/27/2006 09:31:00 AM  
Blogger wfmukerm said...

yes - "prices up" doesn't give me the fuzzy feeling I was hoping for...

though 6% price gain YOY is more palatable than 13% price gain MOM.

6/27/2006 09:31:00 AM  
Anonymous Anonymous said...

REAL SIGNS OF THE HOUSING BUBBLE !!!

Spring and Summer months supposed to be the best months for home sales....but it is not the case this time !!!!

It slowed or even HALTED !!!

6/27/2006 09:33:00 AM  
Blogger grim said...

shailesh,

Unfortunately, no. The NJAR only releases data Quarterly.

We won't see Q2 data until mid/end August. A bit stale.

I tend to favor Otteau, they release data a bit more frequently. However their main report is quarterly as well.

jb

6/27/2006 09:33:00 AM  
Blogger Shailesh Gala said...

Thanks Grim.

Question: I am thinking may be looking at houses in Winter this year or Spring next year. Does anyone knows any lender that may allow to lock in rates for such a longer period??

6/27/2006 09:37:00 AM  
Anonymous Anonymous said...

You wouldn't know it by the stores. They are as crowded as a week before Christmas.

I guess everyone makes $250,000 and has home equity in the six figures as well..

It sucks to be a renter and only make $75,000 a year. You are locked out of the housing market and most of the rental market.

Can't participate in this spending party here in the NYC metro area unless I take on 5 figures of credit card debt.

6/27/2006 09:40:00 AM  
Blogger skep-tic said...

during any point in time, most people are not buying or selling homes. there are only 550,000 homes for sale in the entire country. this is a lot, but as a percentage of overall households, it's small. the point is that most people are relatively unaffected by the housing market in their day to day lives. so you shouldn't expect all commerce to come to a halt just because the housing market is weakening

6/27/2006 09:49:00 AM  
Blogger patient homebuyer said...

those that feel the need to keep up with the jones' will crash and burn!!!

6/27/2006 09:50:00 AM  
Blogger BergenBuyer said...

Wait until July #'s come out, May numbers still take into account some homes that were sold in Feb/Mar before things started going really downhill. I just sold my house (luckily at top dollar, another week or two and my house would probably still be for sale) and closed a week ago, but it went under contract in March. The market was starting to turn in late winter/early spring but wasn't nearly as bad as is it now. At the closing, my buyer told me they still hadn't sold their place and are starting to get worried. I just smiled and gave encouragement, but was thinking inside they were screwed. My house will be in June's #'s and I did very well, so it won't look that bad yet again, not until July and August #'s are reported will we start to see the sales that took place in April/May, the "Hot" Spring Market.

6/27/2006 09:55:00 AM  
Anonymous Anonymous said...

Anon 10:40:

Many homeowners will face tough, soul-searching choices over the next three years, and it's not going to be whether or not to buy a Starbucks coffee. It's going to be whether or not to have another baby, or private vs. public school, or Lexus vs. Corolla or even the bus.

The ripples will flow out to touch a lot of people.

Smart people, who have forgotten or ignored the basics of "no free lunch" have tapped their equity, especially at when refinancing. Even if the economy doesn't slow down..even if it just levels, these people will be hurt.

A calculus teacher told me last night she had no more equity in her home than she did 17 years ago, and her story made me realize that not just young spenders have been making bad choices.

You gotta get a burn to learn.

6/27/2006 09:55:00 AM  
Blogger delford said...

skeptic: There are 550K new homes for sale in the country. The number for existing home is much higher, its over 30K in north Jersey alone.

6/27/2006 10:00:00 AM  
Blogger delford said...

Mr. Lereah says that rising interest rates have impacted the marginal buyers?

So the INT only Neg AM, NO money Down crowd of home buyers the last few years are prime borrowers?

Scary.

6/27/2006 10:09:00 AM  
Blogger X-Underwriter said...

Here's the correct U.S. national figures;

Inventory of existing homes:

2,556,000 May 2005

2,678,000 June

2,756,000 July

2,841,000 Aug.

2,772,000 Sept.

2,868,000 Oct.

2,924,000 Nov.

2,846,000 Dec.

2,883,000 Jan. 2006

2,985,000 Feb.

3,198,000 Mar.

3,415,000 April

3,604,000 May

6/27/2006 10:11:00 AM  
Blogger chicagofinance said...

This comment has been removed by a blog administrator.

6/27/2006 10:13:00 AM  
Anonymous Anonymous said...

subprime is the new place to be, huh?

Wells fargo, et. al.

6/27/2006 10:14:00 AM  
Blogger chicagofinance said...

FYI - for newer participants.

Higher prices on lower volume.

Remember this situation can happen.

Assume no price changes on individual units and lowest priced property drops out.

last year - 1,2,3,4,5,6 =>
median 3.5; volume 6 units

this year - 2,3,4,5,6 =>
median 4.0; volume 5 units

6/27/2006 10:15:00 AM  
Anonymous Anonymous said...

Slow-motion, chain-reaction in the works. Watch it happen. Wait it out. Move in later, if you can.

WM

6/27/2006 10:15:00 AM  
Blogger patient homebuyer said...

Here's the correct U.S. national figures;

Inventory of existing homes:
3,604,000 May
at least there is alot to choose from

6/27/2006 10:24:00 AM  
Anonymous LeeS said...

From today's New York Post

New Fears at Fannie -
The massive portfolios of government-sponsored enterprises such as Fannie Mae and Freddie Mac could become insolvent in a period of "significant interest-rate movement", US Assistant Treasury Secretary Emil Henry said yesterday.

"Unless the portfolios are hedged properly, in a period of significant interest-rate movement, there is a risk to the GSEs that their assets and liabilities will... become broadly mismatched which can lead to insolvency", Henry Said.

But Henry said the massive size of the GSE portfolios - at more than $1.5 trillion - combined with a lack of traditional market discipline and a level of interconnectivity in the financial markets means the GSEs pose a unique systemic risk .
-Dow Jones

6/27/2006 10:25:00 AM  
Anonymous Anonymous said...

Prices have not dropped. In the marginal parts of Jersey City One bedroom condos start at $300,000.

Downtown & on the waterfront, $500,000 is still average for something less than 800 square feet plus HOA fees.

Of course, the demand is from across the hudson. Most buyers are under 30 and make in the mid six figures. Typically the condo association also requires 20% down.

As far as any price reductions, I haven't seen any in the NYC metro area

6/27/2006 10:34:00 AM  
Anonymous UnRealtor said...

"As far as any price reductions, I haven't seen any in the NYC metro area."


I don't know where you're looking, but they've clearly dropped below 2005 levels in the zips I watch, which are "prime" locations.

Any seller who is still priced at 2005 levels, has been sitting on a house for 90+ days.

Other sellers are slowly seeing reality, with a slew of re-listings with price drops this month, after only about 60 days on market.

The market has completely FROZEN, with almost no sales activity. For example I'll see 175 listings, and only 4 or 5 are in any form of a transaction (either attorney review, or under contract).

The days of "multiple offers" are gone, and sellers are lucky to get out now with a single offer.

Who's in the better position, sellers trying to beat an ARM reset, or buyers with 30% down watching prices drop and inventory climb?

6/27/2006 10:51:00 AM  
Blogger grim said...

Got any data to back that up, or is it just anecdotal?

jb

6/27/2006 10:51:00 AM  
Blogger RentinginNJ said...

As far as any price reductions, I haven't seen any in the NYC metro area

It’s a free country; you can ask anything you want, but it doesn’t mean you are going to get it. I’m seeing many price reductions all over the place, but most just aren’t that meaningful enough to get me interested. Which is why sales are down and inventory continues to climb at a staggering pace. It’s a classic Mexican standoff.

6/27/2006 10:52:00 AM  
Blogger patient homebuyer said...

A mortage broker friend of mine describes it as a pissing match between the buyers and sellers

6/27/2006 10:55:00 AM  
Anonymous Baby Boomer said...

this is the beginning of the end for the greedy people, hopefully i can buy my home in the next 6-9 months

I've been reading this blog with some amusement. I'm going to bet that most of you are 20- and 30-somethings. You think that everyone who owns a house is "overextended" and that we'll all be eating beans and taking the bus because the housing market has slowed.

Got news for you folks--remember how many baby boomers there are. A lot of us have been homeowners for 20+ years.

People in their late 40s and 50s are not going to be panic sellers into this weakness, as much as you may hope.

I wouldn't hold my breath for the "crash" that you're all giddily anticipating. Softness, yes. Some of the gains of the last few years gone, sure.

But nobody who bought their house in the 1980s or early 1990s--and a whole generation of us did--gives a hoot.

Dream on, fellas.

6/27/2006 11:01:00 AM  
Anonymous Anonymous said...

Boomer...you sound like Jackie Gleason in the honeymooners.

Pat

6/27/2006 11:08:00 AM  
Anonymous Anonymous said...

Wait until July #'s come out, May numbers still take into account some homes that were sold in Feb/Mar before things started going really downhill.


sound familiar? the sound from behind the wagon.

what's wrong with feb/mar? I thought the downhill started last fall?

I guess things will start going downhill in x when y numbers come out.

P.S.
sales down but median prices still going up in case you didn't notice.

Optimus Primus

6/27/2006 11:09:00 AM  
Blogger grim said...

The median is going up because marginal buyers are getting squeezed out of the low end of the market by dramatically increased rates.

If you lose a handful of low priced sales, what happens? The median goes up.

What does that tell us about the prices of individual homes?

Very little.

grim

6/27/2006 11:12:00 AM  
Anonymous Anonymous said...

boomer - ] From your description you don't fall in the "Greedy" category. So I guess the comment does not apply to you.

The comment was made on a subset of 20+ million home buyers who bought during 2003-2006. The subset includes speculators and ARMers who constitute about 30-40% of total sales.

6/27/2006 11:28:00 AM  
Blogger NJGal said...

"Typically the condo association also requires 20% down."

Uh, where? In Hoboken and JC? No. Just no. Condo associations do not require 20% down. Co-ops maybe, but not condos.

And Baby Boomer, you can say now that you and your ilk won't sell, but let me tell you, the older you get, the quicker things go downhill...just 5 years ago my parents were in their 50s and all was well and good. Now mom has back issues and dad has cancer - makes maintaining their big home, with lots of stairs, bought in the 1970s, an issue for them, and they're not alone among their friends in having such problems. The younger boomers may not have those problems yet, but they're coming, and considering that the "boomer" generation covers a ridiculous period of time, there are plenty over 55 with empty nests who are downsizing.

Don't act so smug. Being older doesn't make you smarter - just older and lucky.

6/27/2006 11:32:00 AM  
Anonymous Anonymous said...

ba ba ba ba baby boomer!!!!

6/27/2006 11:37:00 AM  
Anonymous Anonymous said...

CO-OPs in NYC require 20% Down or that or more in the bank

6/27/2006 11:38:00 AM  
Anonymous Anonymous said...

And don't forget the HELOC abusers(including boomers) who helped change "home as abode" to "home as capital."

See yesterday's discussions for the specific numbers.

I don't understand why someone so set in their ways, who knows so firmly that his opinion is the right one, and who doesn't want to debate...just wants to shut down other person.... would even come to a bubble blog.

Fear?

House on the market for months?

Tapped out on equity?

Thinking of selling but realizing that you can't afford anything else and your stuck where you are?

I just don't get it.

Pat

6/27/2006 11:39:00 AM  
Anonymous Anonymous said...

boomer-

You are correct. Anyone in your situation that isn't planning to retire in the next ten years is probably in good shape.

How many homes were sold/bought in your neighborhood over the last five years? I would be willing to bet you a certain percentage of those people are in or heading towards real trouble in the next year or two.

Also, my guess is a lot of the people who bought 20+ years ago are looking at their homes as retirement nest eggs and are planning to cash out when they retire. Who knows how many that will be, but the boomers hit 62 in two years and become eligible for SS which is kind of a rough indicator of the beginning of a large wave of people retiring and cashing out.

Just my two cents.

JM

6/27/2006 12:09:00 PM  
Anonymous Anonymous said...

To all, apologies for my run-ons. I need to stop trying to eat lunch and type at the same time. Not good at editing with one hand.

JM

6/27/2006 12:10:00 PM  
Anonymous Anonymous said...

I was in Bergen county yesterday. I drove from Cedar Lane in Teaneck to Garden state plaza (well, I took the NJ transit bus, I can't even afford a car in NJ).
I counted 20 houses I saw "for sale" or had a "for rent" sign.

Also saw a RE broker sign for 4.9% comission.

It was pretty crazy. If you don't think there will be inventory glut crash...just drive around like I did.

6/27/2006 12:18:00 PM  
Anonymous Baby Boomer said...

don't understand why someone so set in their ways, who knows so firmly that his opinion is the right one, and who doesn't want to debate...

So anyone who expresses an opinion contrary to that of the blog owner is unwelcome? I'm posting because sometimes, when people are surrounded only by those who agree with them, they lose sight of reality. I think many of you have.

there are plenty over 55 with empty nests who are downsizing.

Absolutely true--but retirement downsizing is rarely urgent. This year, next year, three years from now--it hardly matters. So there's no need to panic and "sell now!" as you all seem to suggest will happen.

Don't act so smug. Being older doesn't make you smarter - just older and lucky.

You're right, my post was obnoxious. But you should hear yourselves. Schadenfreude doesn't even begin to describe it.

Older and "lucky"? Luck has little to do with it. Try owning a house for 25 years. It wasn't always easy. Sometimes it was hard to scrape up the mortgage in the early years. The trick is to stay put--not to "upgrade" with every salary increase.

Thinking of selling but realizing that you can't afford anything else and your stuck where you are?

Are you kidding? Housing prices in many retirement areas are 25% of what they are here. There are probably only a few places we couldn't afford to retire to.

6/27/2006 12:24:00 PM  
Anonymous Anonymous said...

almost the same experience ... at one intersection in Piscataway (opposite the miniature golf course)there were a cluster of about 10 for sale signs. I’ll drive by again today and take a picture.

Maybe we should start a competition on who can find the largest cluster of 'for sale' signs. :)


That will keep us entertained till spring.

6/27/2006 12:26:00 PM  
Anonymous Anonymous said...

Oh..

Boomer may be the one person from Wilkes-Barre/Scranton, Pennsylvania dropping by this blog.

That may be the context of his beliefs.

No recent price increases, no economy to speak of, etc.

Therefore, no bubble impact.

Pat

6/27/2006 12:27:00 PM  
Blogger BergenBuyer said...

Optimus Primus,

Not sure if you're agreeing with me or not, but I think things are going downhill now and will continue to go downhill. I wasn't saying they haven't, I'm just saying the numbers that are being released are 60-120 days behind (the typical time to close on a house). So the numbers (1.2%) may not seem that dismal now, but they will soon.

I'm in the market for a house, but I'm in no rush because the market just keeps dropping. I ask my realtor for info all the time to help me make a decision about when to buy and he's got nothing and says anything the NAR puts out is spun to look better. No one knows what to do because all of the info that is published is spun to look a certain way.

All I see are the same houses I've been looking at since January with only a handfull sold. Houses just aren't selling and I've seen price drops of 10-15% and still no action. I've made 3 offers on homes 10-15% less than asking since January. One of them came back to me after 3 weeks and wanted to accept my offer. I said no thanks, the market has changed. I lucked out they didn't accept my offer the first time, now the house is listed lower than what I offered and still no takers. I got lucky. Stupid of me to offer only 10% less than asking, even dumber for the seller not to accept it when they had the chance. I think my offer now would be 15% lower than current asking, which would be about 25% less than their old asking when I bid and 40% less than original list price.

6/27/2006 12:29:00 PM  
Anonymous Anonymous said...

If you lose a handful of low priced sales, what happens? The median goes up.

What does that tell us about the prices of individual homes?

Very little.

grim


so if median goes down should we brush it off as well?

6/27/2006 12:29:00 PM  
Anonymous Anonymous said...

Boomer - now you're opening up.

6/27/2006 12:29:00 PM  
Anonymous Anonymous said...

There's been an absolutely stunning increase in the number of houses on the market in Summit/Chatham etc. area, if my observations while driving around there this weekend are any indication. There were also many open houses with no apparent visitors parked nearby.

6/27/2006 12:32:00 PM  
Anonymous Anonymous said...

Nat'l Housing Inventory:

Existing 3.64 M
New .55 M

Total 4.1 Million houses for sale

6/27/2006 12:33:00 PM  
Blogger Richard said...

everyone remember this is just a glimpse of the slowdown as closed may sales happened during agreements made in the feb/mar/early apr timeframe when the 'spring bounce' while not stellar was still decent historically. i expect june numbers to look a bit better than may, then inventory and sales comparisons y-o-y from july forward are going to show a steep decline. i'm fully expecting double digit declines in transactions and inventory y-o-y in the 60% range by end of summer.

6/27/2006 12:38:00 PM  
Anonymous Anonymous said...

Anyone know whats going on
in Palisades Park,, seems like
many, many homes for sale. Alot
of those side by side two families.

Prices seem very high.

Feedback Please.

6/27/2006 01:00:00 PM  
Blogger BergenBuyer said...

Richard,

I agree with you 100%.

6/27/2006 01:01:00 PM  
Blogger grim said...

Richard,

Are you talking nationally? Or Northern NJ?

On an unadjusted basis, June sales typically track higher than May in Northern NJ, usually by a large percentage.

However, we've just recently passed a critical point in our own market. From this point on, contracts typically fall until next spring. The peak in sales that is typically seen in July/Aug/Sept timeframe is as result of contracts signed in the May/June timeframe.

This graph should give you a good idea of what I mean.

Northern NJ Market Pulse

This is a graph from my own private collection. It's not one I have ever made public. ALthough I'm sure all of you will want it, when you see it.

grim

6/27/2006 01:01:00 PM  
Anonymous Anonymous said...

http://www.socialfunds.com/news/article.cgi/2032.html

Sorry if this article was already discussed, but I was wondering about any specific impact on NNJ relative to higher rates of subprime lending to minority borrowers.

Does income level in NNJ counterbalance the higher risk of subprime loans, when comparing NNJ to PA, for example?

Pat

6/27/2006 01:04:00 PM  
Blogger patient homebuyer said...

the common bond i see here is it does not matter what area you are from there are an alarming number of for sale signs. it does not matter where you are.

6/27/2006 01:10:00 PM  
Anonymous UnRealtor said...

"There's been an absolutely stunning increase in the number of houses on the market in Summit/Chatham etc. area"


Did you catch the house in Summit (near route 124 East/Short Hills Mall) that had plywood signs on every corner saying "House for auction today, will sell to highest reasonable offer" on Sunday?

It's on the corner (forgot the cross street) with route 124, big newer house.

6/27/2006 01:18:00 PM  
Anonymous UnRealtor said...

Boomer, so you haven't observed retirees pressured to 'cash out' now? Why would they throw away $100K or more?

A retiree planning to downsize (to a condo, somewhere with lower taxes, etc) who didn't sell at the top, is either a sadist, in denial, or wealthy enough not to care (rare).

6/27/2006 01:22:00 PM  
Blogger chicagofinance said...

This is a graph from my own private collection. It's not one I have ever made public. ALthough I'm sure all of you will want it, when you see it.
grim
6/27/2006 02:01:49 PM

grim: you make your graphs sound like wine stored in your cellar

6/27/2006 01:33:00 PM  
Blogger chicagofinance said...

Baby boom:

Do you recall the older woman from the Upper East Side of Manhattan who was interviewed after Nixon won the Presidency in the 70's?

She said "I don't know how he won the election. Nobody I know voted for him."

6/27/2006 01:38:00 PM  
Blogger grim said...

cf,

It's only because I've been saving that one for a special occasion.

grim

6/27/2006 01:43:00 PM  
Blogger Richard said...

"Are you talking nationally? Or Northern NJ?

Northern NJ grim. Your graph supports what I'm saying about seasonality factors but I'm positing that the y-o-y transaction decline and inventory increase will be steeper due to the # of listings that seems to of exploded with few sales around the may/jun timeframe supporting the 'mexican standoff' analogy.

6/27/2006 01:44:00 PM  
Anonymous Baby Boomer said...

Boomer, so you haven't observed retirees pressured to 'cash out' now? ....A retiree planning to downsize...who didn't sell at the top, is either a sadist, in denial, or wealthy enough not to care

Pressured to "cash out" now?

Why? For what reason?

If my house is worth less when I decide to sell, well, then the retirement house I buy will likely cost less, too.

"Selling at the top" isn't something boomers think about. You forget...we bought houses to live in, not investments to make a killing on.

It's you 30-somethings who think real estate is a market to be timed and gamed.

6/27/2006 01:51:00 PM  
Anonymous Baby Boomer said...

"I don't know how he won the election. Nobody I know voted for him."

That works both ways. You're right that I don't know all the flippers and ARM/negative amortization/zero down folks who are panicking...

And you don't know all the 55+ boomers who paid off their mortgages five years ago and don't give the "bubble" a second thought.

6/27/2006 01:59:00 PM  
Anonymous UnRealtor said...

Pressured to "cash out" now? Why? For what reason?

An extra $100,000+ in retirement income?



"Selling at the top" isn't something boomers think about. You forget...we bought houses to live in, not investments to make a killing on.

So boomers are so wealthy, they don't care about an extra $100,000+ in retirement income?



It's you 30-somethings who think real estate is a market to be timed and gamed.

I was unaware that boomers didn't care about managing their income and assets, thanks for the insight.

6/27/2006 02:01:00 PM  
Blogger skep-tic said...

Nat'l Housing Inventory:

Existing 3.64 M
New .55 M

Total 4.1 Million houses for sale

OK, but my point above still stands. A pretty small percentage of the overall number of houses that exist are for sale at any given time. Boomer is correct that many people will be largely unaffected by a turn in the housing market. I do not think a housing downturn will destroy the overall economy (short of a major catastrophe like a blow up of the MBS market).

The people who WILL be affected are those who bought recently and bit off more than they can chew, people who HELOC'd the sh*t out of their homes, people who work in the housing industry (and related), and last but certainly not least, first time buyers.

The long term outlook for buyers in their 20s and 30s is very good for real estate. Boomer homeowners like BOOMER will see some of their paper gains disappear over the next few years, but again it shouldn't really matter to them anyway if they own their homes free and clear.

You cannot fight the demographic trends, and there are simply far fewer people my age than my parents age. Big suburban homes should get hit hardest. Apts in the city less so

6/27/2006 02:03:00 PM  
Anonymous Anonymous said...

It's you 30-somethings who think real estate is a market to be timed and gamed.

Market timing was difficult 20 years back because it was difficult to bring together like minded people. Folks relied on realtors to make (bad) decisions for them. Internet makes market timing possible. It allows like minded people organize better. With organization comes power to dictate market conditions. The power centers are now distributed and the likes of NAR don’t have the same monopolized decision making they previously enjoyed.

Information is just a click away and bad news spreads fast.

6/27/2006 02:12:00 PM  
Anonymous Anonymous said...

So many generalizations about 20 & 30 somethings.. Look we do have to make smarter investments .. Like looking at a house asboth a home an investment. Older generations gave us no choice.. Where is our Social Security or pension?

6/27/2006 02:32:00 PM  
Anonymous Anonymous said...

Not to mention job security .. virtually NON-EXISTENT

6/27/2006 02:35:00 PM  
Blogger X-Underwriter said...

Baby Boomer,
Just like a lot of people in your generation, you're only worrying about yourself and your friends.
Who do you think is going to buy your house when you decide to sell it? The next up and coming generation certainly won't be able to afford it. Who cares about them though? I've made my dough.
You sit there thinking that I own my house free and clear so nothing can touch me.
I don't even think I've seen you make any concessions that the entire real estate industry is in risky uncharted territory. That's the purpose of this entire website. To discuss these issues.
I admit it's turned into a sport and many posters here, including myself, have done the schadenfreud thing but I think you need to read the facts that are also being presented here.
This country's economy is heading for a heap of trouble if the market takes a major fall.
I don't know what you do for a living but you'll be affected by it somehow too.

6/27/2006 02:35:00 PM  
Anonymous Anonymous said...

Whatever happens, homeprices wont drop below the levels seen in the fall of 2002. I dont have the studies with me, but I have seen the typical houseprice-inflation/affordability graphs which marked 2002 as a year of equilibrium, ie prices were exactly at the point of affordability. Its only since then that the 40-60% appreciation based on the 4% discounting on ARMs has taken place.
So boomers who bought in the 80s or 90s need not bother, they are most probably sitting on 100% gains in their houses. If prices decline, boomers will still be ahead by over 50%, which is a pretty good appreciation anyway.
Truely speaking only those buyers who bought after 2003 have to be worried about price declines. And if those buyers manage to stayput for 10 yrs in those houses, they would have not lost anything.

6/27/2006 02:43:00 PM  
Anonymous Anonymous said...

3:32 Never say never.

Not around bubblers.

Now we're gonna have the depression/recession/stagflation debate.

6/27/2006 02:48:00 PM  
Anonymous Anonymous said...

Anon 3:43,

Let me take a wild guess... you bought in 2002, right?

6/27/2006 02:51:00 PM  
Anonymous Anonymous said...

Not that is not fair and I am not anon 3:43..

6/27/2006 02:52:00 PM  
Anonymous Baby Boomer said...

So boomers are so wealthy, they don't care about an extra $100,000+ in retirement income?

Never counted on it. And as I said, if I do sell, I'll be able to buy my retirement place for correspondingly less. You don't bother to address that.

I was unaware that boomers didn't care about managing their income and assets, thanks for the insight.

Of course we care. That's why there are 401(k)s and IRA's. Managing a primary residence like an investment asset is nuts.

Where is our Social Security or pension?

Boomers can't count on those either. And job security--any idea about what it's like to lose a job at age 50? It makes losing one at age 35 seem like a walk in the park.

Just like a lot of people in your generation, you're only worrying about yourself and your friends.

Nope, we're also worried about our kids, who are in their 20s.(Four years of college at $40K per.) And our parents, who are in their 80s.(Medicare does not pay for home care for the most part.)

Somehow we're managing to take care of everybody, whether you appreciate it or not.

6/27/2006 02:56:00 PM  
Blogger skep-tic said...

if prices go back to 2002 levels, that will still be a 30-40% drop.

but I agree that I can't see prices going much lower

6/27/2006 02:58:00 PM  
Blogger grim said...

Whatever happens, homeprices wont drop below the levels seen in the fall of 2002.

So what you are saying is that median home prices will drop 27% and average home prices will drop 21% over the next few years?

Factor in inflation and what you are saying is real house prices are going to drop over 30%.

From the NJAR dataset:

Q4 2002
Median Price $315,600
Average Price $344,900

Q1 2006
Median Price $432,000
Average Price $438,200

grim

6/27/2006 02:59:00 PM  
Blogger grim said...

baby boomer,

Thanks for joining the discussion. We appreciate a counterpoint here.

Most of the counterpoint visitors here are trolls. They get bored and eventually leave. But some have managed to stick around, and we value their opinion.

I'm sorry if you might feel like you are being ganged up on, it's only due to the demographic here.

jb

6/27/2006 03:03:00 PM  
Blogger X-Underwriter said...

Baby Boomer said...
Nope, we're also worried about our kids, who are in their 20s.(Four years of college at $40K per.) And our parents, who are in their 80s.(Medicare does not pay for home care for the most part.)

So it doesn't concern you that your kids won't be able to afford a decent home to raise their family unless you cut them a check for $200,000 or more?

6/27/2006 03:05:00 PM  
Anonymous Anonymous said...

Anon 03:51
Actually I didnt buy in 2002, and rue my decision of not having done so. In 2002, I moved to this area from Georgia and really had a case of sticker-shock. When I read that prices had already risen about 40% from the 1998 lows, I automatically assumed that we are in a bubble. So I shut my eyes, and went to sleep hoping for a price collapse.
When I saw prices rise so fast every year, I very nearly bought in 2005, and I think it wudve been a bigger mistake to buy in 2005 than to not buy in 2002.
I am a regular to this blog, and have studied a lot of analyses from several different sources. RE is like a pendulum, swinging between extremes. 1989 was an extreme at a price high and it took almost 8-9 years for the bottom to arrive in 1998. However, that too was an extreme. Affordability in 1998 was the highest in more than 2 decades. No one thought of RE as an investment, everyone had put their eggs in the stock market.
So when the pendulum started swinging the other way, prices and affordability got back at equilibrium in 2002. You can see that the price increases matched the 30 yr FRM decreases from 2000 to 2002. Since 2002, the FRM has more or less remained steady, but prices went up because of the discounting in the ARMs.
With the increases in the 10yr UST, the FRM may go back to what it was at 2001 levels, and accounting for inflation since 2002, I expect prices not to decline below 2002 levels. That is the basic jist of my analysis.

6/27/2006 03:06:00 PM  
Anonymous Anonymous said...

Ok.. You will have some form of SSI .. for those in the 30's and 20's it will be non existent and your 50's arguement.. That generation will probably at this rate have to be 85 to collect anything because people are just living longer. . PS.. yes I know first had what is like to lose a job at 50. I lived through it.. Guess what got us through,, Real estate, Can't tap into 401K's.. and Taxes I could go on and on about the percentages YOY verses the percentages the 50 somethings had to deal with..We ALL are such a consumtion society that we have driven the cost of living up to our necks and the salaries haven't moved to match these expenditures not to mention the property taxes, college for the kids .. there was a whole article on this in the WSJ.. I have to find it.

6/27/2006 03:14:00 PM  
Anonymous Anonymous said...

I'm a boomer too, but one who knows that our national savings rate is negative, and that the average savings any given boomer will take into retirement is around $50,000.

And that a good number of us have taken out HELOCs because we think that housing never goes down. And that even after we've sucked the cash out, we think we'll have enough equity in our homes to fund our retirements, so why save?

For every prudent boomer I can show you 4-5 spendthrift ones. We're not that much different from everyone else caught up in this maxed-out culture.

6/27/2006 03:17:00 PM  
Blogger Shailesh Gala said...

baby boomer: Welcome. Don't at all feel negative about the comments on the board.

I feel every generation faced challanges, but they were different in nature. I am sure your generation faced challanges in someways as you mentioned earlier.

But you have to agree that today's generation also faces much different challanges, not faced by earlier generation. Here are few,

1. The proportion of DINK families have increased, causing larger economic differences in the society. The Have's & Have Not's have increased significantly compared to 30 years ago.

2. Similarly the last 5 years of Boom in RE has also caused, large economic segragation. This is not due to hard work, just plainly being lucky to be at right time at right place to buy a house. You can't say that someone who is 30 now, should have bought house at 25, just out of college, trying to get just decent job.

3. The current generation faced much more turbulant time as Internet bubble bursted, and outsourcing is posing challange to White Collar jobs.

4. In NNJ, the current generation also faces challange due to significant NIMBY movements. 30 years ago, no body was opposed to building SFH for middle class, today almost all towns are opposed to that.

5. On top of all that, you have longer term issues like SS running out, Rising Healthcare & Education costs, Stock market volatility etc...

I am just pointing out few of the differences faced by today's generation. Would like your opinion on these challanges as it may provide alternatives.

6/27/2006 03:18:00 PM  
Blogger grim said...

Anons,

Please take the time to either register or to sign your messages.

It is difficult to follow the discussion when there are multiple users posting anonymously.

jb

6/27/2006 03:19:00 PM  
Blogger chicagofinance said...

And you don't know all the 55+ boomers who paid off their mortgages five years ago and don't give the "bubble" a second thought.
6/27/2006 02:59:39 PM

BOOM:
You have a right to your opinion, but research doesn't bear out your point. Even those people who are fiscally sound still monitor the value of their net wealth. They know their home is worth X in the summer of 2005, and they feel the emotional impact of knowing that the home is worth 0.75X in the summer of 2007. It's just human nature and it has been borne out again and again in psychological research.

I wish people would be more pragmatic, but alas, they are not.

chicago

6/27/2006 03:23:00 PM  
Blogger BergenBuyer said...

I agree with Baby Boomer in that boomers will not panic and sell their house at whatever price. Many homes for sale where I am looking right now are being fished for a top price. Most of them are from soon to be retirees that probably already own a house in FL or a house at the shore and have the mindset that if they can get $X, they'll sell and live at their other house. If not, they'll wait until they can get $X. They're in no rush, they don't have an ARM resetting or need the cash because they already bought another home.

However, there are plenty of other people that stretched and have ARM's that will reset soon that will be forced to sell. That, on top of an already deep inventory of homes will drive prices down. How much, I have no idea, but hopefully I'll get lucky and buy at the bottom.

6/27/2006 03:24:00 PM  
Anonymous Anonymous said...

Yeah, Boomer:

I'm a worst offender here, so I'll go ahead and rescind my Jackie Gleason comment.

Pat

6/27/2006 03:26:00 PM  
Blogger chicagofinance said...

Just to point out, all that matters are the transactions on the margin.

You can ten identical homes on a street, all worth $500K. One owner gets squeezed and sells for $425K. Well, everyone on the street just lost $75K on paper without doing anything.

Don't tell me it doesn't affect people's behavior, even if they have no mortgage.

What about the person who bought two months before who bought with an 80/10/10 set-up. Instantly upside-down. How do they feel?

6/27/2006 03:30:00 PM  
Anonymous Anonymous said...


from cnn -
Will markets actually fall? Nobody knows. Shiller says that, long term and adjusted for inflation, home prices bounce up and down but essentially stay flat over the decades. If that is the case, then the out-sized returns of the past few years would argue that, to catch up with the runaway markets, prices would have to at least stabilize for a few years, even if they don't actually fall.


those who are giddy about a collapse are obviously those who missed out on the huge gains everyone and their mother are enjoying. it's so obvious from the hateful attitude some posters have towards homeowners calling them idiots and greedy.
but who's the one eagerly anticipating for the market to come back for them?
if the market does come back and you all hop in then we see an even bigger boom, ofcourse none of you would sell, right? you would wait for prices to come back down to earth. surely, you won't become one of those "greedy sellers".

btw, this is not addressed to every poster anticipating a downturn in housing or grim. there are those who are filled with such envy and hate and so amused and eager to hear about the demise of others. you know who you are. bob for one. it's one thing to hope prices become more affordable. but to rejoice in seeing people suffer in the process...i don't know what that is.

JS

6/27/2006 03:35:00 PM  
Blogger BergenBuyer said...

Does anyone have any thoughts or even better stats of which price ranges will be affected the most from price declines?

Will starter homes be hurt the most because there are no more first time home buyers that can buy because of a low int rate?

Or will it be the $1M to $1.5M homes that people who have money, but still stretched to get in to and their mortgages are now resetting?

I see multi million dollar homes being affected because the market will reach all prices, but not as much. A person buying a $5M home usually has the money to buy the home outright, so they're less affected by int rates and it is not their biggest asset compared to everyone else.

I appreciate your thoughts.

6/27/2006 03:35:00 PM  
Anonymous Anonymous said...

JS - I would like prices to be more reasonable, I am not hoping for a crash but a decline, yes. I also don't wish to see people suffer, but I am a bit fed up with the realtors who lie about the market in attempts to get you to buy anything.

jj

6/27/2006 03:42:00 PM  
Blogger Richard said...

"Many homes for sale where I am looking right now are being fished for a top price

quite true. then again i've seen a portion of these going to fire sale prices due to an impending retirement move. i think the key here is affordability. in the end most people take the monthly payment to determine what they can get into. it's just the way people plan their finances. as interest rates rise and ARM's reset this is going to put pressure on the margins. how much is the question. $1 trillion will reset next year with a near guaranteed 7%+ fixed interest rates. this will affect prices across the spectrum. no one here has a crystal ball but one thing seems clear. prices are far more likely to go flat to down than up over the next 12-18 months.

6/27/2006 03:49:00 PM  
Anonymous Anonymous said...

jj: I agree about truth by agents.

Are any realtors around here walkin the walk like the ones I'm seein now in the D.C. burbs? I check in on their use of language every once in a while on realtytimes.

Here's an example:
http://tinyurl.com/rvye8

"It's a Buyer's Market in Fairfax County, and Buyers have more time to browse, choose and bargain. Homes are staying on the Market much longer -- an average of 51 days versus 15 days last year at this time, and the Average Sale Price is a paltry 97% of the list price (vs.over 100% last year this time). Inventory is Waaay UP especially for homes above $400K and condos above $250K -- there are currently a whopping 8,811 active listings in Fairfax County with only 1,615 of them under contract!! Condition is a HUGE issue correlating directly with price. IF you find a fixer-upper---jump on it---ONLY IF it's priced for condition. With the Average Sold Price for all homes at $550,656, there are no bargains in the sense of actual dollar amount. (THIS is what is called NORMAL APPRECIATION), there are few bargains in the sense of actual dollar cost. CONDITION is paramount at $500K and above; school districts increase in importance in driving sold prices (there is a direct correlation between Buyers' perception of 'good' school districts and sold prices and rate of increase of appreciation).! If you're a purchaser---watch for days on market and price reductions and don't be shy about making an OFFER! Sellers, you need to price your home realistically and "listen to the market". 2 weeks on the market with little traffic & no offers translates to "your home is overpriced". Be willing to reduce the price and negotiate if you want a quick sale!


Approximate Location Boundaries: ALL of Fairfax County: The Good, The Bad, The Ugly---and it all costs more now. "


She sounds more like Bob than a Realtor.

Pat

6/27/2006 03:58:00 PM  
Blogger skep-tic said...

I think the high end is going to get hit hard. In particular, suburban SFHs $1 million+.

There has been way too much high end construction. Practically every new house I see is priced over $2.5 million.

I think there is a backlog of first time buyers dying to get into SFHs $500,000 and below. But there just aren't that many people who can afford $1 million+ houses. When builders are forced to liquidate this inventory, it will have a ripple effect all the way down the line.

6/27/2006 03:59:00 PM  
Anonymous Anonymous said...

With all this talk about ARMs resetting in 2007 and 2008, is there any way to find out which banks are the most vulnerable to defaults - not just locally but nationally?

We sold my late parents' house last winter and now I'm invested in bank CDs.

6/27/2006 04:06:00 PM  
Blogger BergenBuyer said...

skep-tic,
I agree with you and the market where you are seems to be where I am (northern bergen county) $500K is usually the lowest price house in a town and anything on a decent street is $700+ with most homes in the $1M+ range.

I think even high $400's to $500K is still too high for first time home buyers. If a first time home buyer has $100K saved (which is a lot and I don't think many have) that's their 20%. They have to mortgage $400K, which depending on taxes (I'll use $7K) is like $3300/mo. I'm not sure what the median income is in NNJ, but I don't think it's over $100K. $3300/mo is not affordable to anyone making less than $100K, $150K is more like it.

I think prices need to be in the $300's and low $400's for first timers. That way they're only mortgaging ~$300K and their mortgage with taxes is more like $2500/mo.

I know that if I didn't buy my house in 2001 and then just sell it, I would not be able to afford a house in this market. The only reason why I can is because I've got a big down payment from the equity built in my old house. I got lucky.

6/27/2006 04:20:00 PM  
Blogger chicagofinance said...

Anonymous said...
With all this talk about ARMs resetting in 2007 and 2008, is there any way to find out which banks are the most vulnerable to defaults - not just locally but nationally?

We sold my late parents' house last winter and now I'm invested in bank CDs.

6/27/2006 05:06:12 PM


Don't hold more than $100,000 in combined balances at any one bank under a person's name [in any form of account title].

6/27/2006 04:37:00 PM  
Blogger BergenBuyer said...

anon,
call the FDIC (I did) they're very helpful and will guide you through what you can do to max your insurance. It's actually greater than $100K if you do it right. Explain to them what you have currently and they'll give direction.

6/27/2006 05:03:00 PM  
Blogger REINVESTOR101 said...

From Baby Boomer>>I've been reading this blog with some amusement. I'm going to bet that most of you are 20- and 30-somethings. You think that everyone who owns a house is "overextended" and that we'll all be eating beans and taking the bus because the housing market has slowed.

Got news for you folks--remember how many baby boomers there are. A lot of us have been homeowners for 20+ years.

People in their late 40s and 50s are not going to be panic sellers into this weakness, as much as you may hope.

I wouldn't hold my breath for the "crash" that you're all giddily anticipating. Softness, yes. Some of the gains of the last few years gone, sure.

But nobody who bought their house in the 1980s or early 1990s--and a whole generation of us did--gives a hoot.

Dream on, fellas.


Amen!! I look forward to hearing more from you

6/27/2006 05:12:00 PM  
Anonymous Anonymous said...

reinvestor -
amen??

So you agree with 'boomers' analysis that gains made during the last few years will be wiped out??
Boomer] Softness, yes. Some of the gains of the last few years gone, sure.

or will you as usual change topic and start ranting about something completely unrelated?

6/27/2006 05:24:00 PM  
Anonymous Anonymous said...

Poor reinvestor , he has an illness.

6/27/2006 06:01:00 PM  
Anonymous Anonymous said...

Yeah, it might be upsidedownitis.

Dramamine may help.

Pat

6/27/2006 06:15:00 PM  
Blogger Richard said...

it's simple. the latest statistics in the northeast show 70% of homeowners couldn't afford to purchase their house given today's prices. that my friends is unsustainable.

6/27/2006 06:19:00 PM  
Anonymous Anonymous said...

Stuck! Homes sit longer on the market
"It's taking longer to sell a house these days. Is this another sign that the boom is over?"

http://money.cnn.com/2006/06/26/real_estate/days_on_market/index.htm

Pat

6/27/2006 06:34:00 PM  
Anonymous Anonymous said...

richard -
The trend will continue until there is a credit squeeze. Right now any insane person will qualify for exotic mortgages... that has to stop and only then will the bubble burst. The bubble will grow until there is a credit squeeze. Even now 30% of mortgages are still ARM/Interest only.

6/27/2006 06:37:00 PM  
Anonymous Anonymous said...

Thanks Pat - I can't help but read the realtytimes sometimes to see how bad NAR will sink - it is worse than bad tabloid reporting- complete trash, but fun to read for a good laugh. :)

jj

6/27/2006 07:03:00 PM  
Blogger grim said...

Here is a gem from Realtytimes.

June Roundup

"Financial markets believe that the current rate of inflation is above the Fed's comfort zone, which will lead to more rate hikes in the near future," Frank Nothaft, Freddie Mac vice president and chief economist, warned. "A rate hike in July is thought to be a sure thing, and what was believed to be a vaguely possible hike in August is now considered to be highly likely."

So the handwriting is on the wall. If a new house or mortgage is in your immediate future, you'd better get cracking.


grim

6/27/2006 07:06:00 PM  
Anonymous Anonymous said...

bergenbuyer, chicagofinance -

Thanks for the advice about FDIC insurance. My family unit is very much aware of the $100,000 limit on bank insurance because my grandmother got snagged by the S&L debacle of the 80's. She had a CD that had rolled up to $106,000 with interest, and lost the $6,000. So I'm diversified in several banks and under the $100,000 limit.

What I'm concerned about is that if a big chunk of these ARMs and exotic mortgages go bad, couldn't we have more banks in serious trouble?

I know about bankrate and its "safe and sound" rating system. But is there any way to know which of the banks have greater exposure to the riskier loans?

My mother lectured us to sell the house "as soon as possible" because she felt the bubble had already peaked and once the Fed met in March and May - and raised rates - it would be clear that the bubble had popped. And we did close in early March ahead of that March meeting.

But now I'm getting a little concerned that some of the banks could take a serious hit on the downside.

6/27/2006 07:07:00 PM  
Anonymous Anonymous said...

Berger Buyer,

I agree with your analysis of the first-time buyer finances. If the median income is only in the 70-80k range in NJ, your analysis makes sense. Additionally, I doubt (though this is a guess) that most first-time buyers can save up anything close to $100k, I would point to the large number of recent 100% financing deals, whether 80/10/10 or some variation.

Hence this would put major pressure on the lower end of the market, which would bring prices more in line with wages.

Andy

6/27/2006 07:41:00 PM  
Anonymous Anonymous said...

Get out that whip - crack! Now buy that house darnit!
...I'm only cracking up. So embarrassing for her.

jj

6/27/2006 08:21:00 PM  
Anonymous dreamtheaterr said...

Let me reiterate how hard it is for a family to save up for a downpayment in the NY/NJ metro area on <$100K salary. We live a fairly frugal life, and put aside $1K a month for the down payment. Even $12K a year saved means atleast 4 years to amass the 20% for a decent 3 bed in Middlesex county.

6/27/2006 10:03:00 PM  
Anonymous another boomer said...

Baby Boomer- are you for real? Or were those comments made, as I suspect by some fearful home"owner" of unknown age?

As a boomer myself I find your condescension and callousness totally uncalled for.

I wonder why, if you really are free and clear on your home, you would be visiting this blog at all.

If you own free and clear and don't care how far the market falls then why are you being such an , excuse me, SNOT and lording it all over people who just want to own at a decent price?

Something is not adding up.

As a boomer who DOES own fee and clear and has not extracted "equity" from my home, no debts, mortgage paid off, I am routing with everybody here for a swift , terrifying crash of this market.

It is not healthy for society when people go bonkers over a basic need- shelter.

It is not healthy to spend so much of one's income on a home.

Just pull the rug out from under this insanity and get it over with so we can all go back to being normal again.

6/27/2006 10:18:00 PM  
Blogger RentinginNJ said...

But is there any way to know which of the banks have greater exposure to the riskier loans?

It’s a tough call, because a good deal of mortgage debt is sold off as mortgage backed securities and not held by the bank. Just because a bank originates a loan, doesn’t mean they hold it.

From WaMu’s 10-K:
the sustained liquidity of the Option ARM product in the secondary market enabled the Company to sell approximately $48.13 billion of Option ARM volume during 2005, compared with $14.12 billion in 2004. The Company also sells substantially all of its fixed-rate and medium-term adjustable-rate home loan volume.

You also have to be careful about income statements, which could show strong results, but look riskier on closer inspection (WaMu again):
Deferred interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $316 million, $19 million and $7 million for the years ended December 31, 2005, 2004 and 2003.

If you are concerned about your CD’s, I might suggest you look into US Treasury Bills. The 6-month bill is yielding 5.31%. No comission, no state income tax @ Treasurydirect.gov

6/27/2006 10:32:00 PM  
Anonymous Anonymous said...

rentinginnj -

Thanks for all the interesting info. I didn't know any of that. I'm a life-long renter so I've never been involved in mortgages.

5.31% on a 6-month?

Will check out treasurydirect tomorrow.

Thanks again.

6/27/2006 11:11:00 PM  
Anonymous Anonymous said...

second boomer] i never thought about it that way. you are absolutely right. why get emotional if you don't care?

6/28/2006 05:53:00 AM  
Anonymous Baby Boomer said...

As a boomer myself I find your condescension and callousness totally uncalled for.

If you read carefully, you'll see that I had already apologized for my initial, admittedly obnoxious post. I had meant it merely as an antidote to the excessive giddiness about the impending real estate crash so talked about on this board.

If anyone who comes to this board with a difference of opinion is going to be psychanalyzed and accused of being emotional, you'll all soon end up surrounded by people who only agree with you, and that, as I pointed out, is dangerous.

Why I'm here? I found this board through the links on the NY Times real estate blog.


I do have young 20-something kids (one just out of college, and one graduating next year). I do wonder what the future holds for them.

Sorry that I invaded your space here. Attack my views, sure, but it's absurd to question "who" I really am and what my intentions are.

Thanks, Grim, for the interesting, intelligent, citations and sourcing.

6/28/2006 06:28:00 AM  
Blogger REINVESTOR101 said...

If you read carefully, you'll see that I had already apologized for my initial, admittedly obnoxious post. I had meant it merely as an antidote to the excessive giddiness about the impending real estate crash so talked about on this board.

If anyone who comes to this board with a difference of opinion is going to be psychanalyzed and accused of being emotional, you'll all soon end up surrounded by people who only agree with you, and that, as I pointed out, is dangerous


I didn't find anything obnoxious about your initial post at all, especially in comparison to other posts calling for boycotts, crashes and etc. Of course, you're right when you say that some do not wish to hear a different view of matters. Notwithstanding that, I'd encourage you to continue to express your views.

Be mindful that what you're seeing here is the outlines of a class war of sorts. Those individuals who were left out of the real estate boom are extremely resentful. This explains all of the giddiness and mirth over the supposed collapse of real estate and the financial ruin of realtors, investors, homeowners, mortgage brokers and etc.

6/28/2006 06:48:00 AM  
Anonymous Anonymous said...

hmmm.. REINVESTOR finds a chance to add 'some value' to the discussion but of course exaggeration is part of his tactics.

I don't know of anyone on this board wants the housing market to crash. They just wish all speculators and their agents get a chance to reflect on their misadventure.

I'm not against people buying a house to get a roof over their heads but if you are taking an exotic mortgage in the hope of making the next generation pay for your retirement by forgoing theirs then I say you should be given a chance to reflect.

6/28/2006 07:07:00 AM  
Blogger BergenBuyer said...

Anonymous,

Here's a report from the FDIC about the banking industry in general and tehy speak specifically to ARM's resetting.
www.fdic.gov/news/board/0659m2.pdf
If the link doesn't work just type

economic conditions and emerging risks in banking may 9, 2006

into google and it will show up.

6/28/2006 07:59:00 AM  
Blogger delford said...

reinvestor: Will you ever stop with the class war nonsense? Are the sub-prime borrowers and specualtors who did much to cause the bubble, are you telling use, that they are better than amny of us who have no debt, who save and invest.

I could have bid along with the rest of them and in fact I did, but I ended up walking away, and made a prudent decesion to rent.

Why would I get involved in a bidding war with some moronic sub -prime borrower, or flipper, or no many down idiot. Its not a class war, its a war against the stupidity of recent s called buyers.

Oh and there is nothing wrong with saying I told you so.

6/28/2006 08:28:00 AM  
Anonymous Anonymous said...

delford -
No, there is nothing wrong with saying, "I told you so." Hindsight is 20-20, but that assumes the person you are debating with agrees/is on the same page that something happened in the past.

The majority of people, not just reinvestor, still believe there was no run up (or bubble) in housing prices. For example, the use of the terms, "supposed collapse" or "a return to normal conditions," imply a positive view of the current and near-term market.

Those folks that do not believe in a bubble absolutely cannot agree with you until well after the fact.

That is the difference between a Contrarian and a Market Follower.

Ne'er the twain shall meet.

6/28/2006 10:04:00 AM  
Anonymous ser said...

Well said Anon.

6/29/2006 12:53:00 AM  

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